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Orange County Comprehensive Economic Development Strategy 2014 Annual Update

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Orange County Comprehensive Economic Development Strategy 2014 Annual Update Orange County Comprehensive Economic Development Strategy 2014 Annual Update The 2013-2018 Annual Update November 2014 Comprehensive Economic Development Strategy Presented by County of Orange ORANGE COUNTY WORKFORCE INVESTMENT BOARD Introduction Page | 1 Orange County Comprehensive Economic Development Strategy 2014 Annual Update Introduction The Orange County Workforce Investment Board (OCWIB) is appointed by the Orange County Board of Supervisors, and the OCWIB’s responsibilities include overseeing the Comprehensive Economic Development Strategy (CEDS) for Orange County. Operating as the designated coordinator of local workforce development, the OCWIB has developed the CEDS to provide valuable information on Orange County’s economic environment and emphasize potential plans for developing and growing the county economy. The most recent iteration of the Orange County CEDS was completed in 2013, which identified 71 “Red- Zone” regions throughout the county characterized by both low income and low employment. The 2013 CEDS also outlined five new goals backed with action strategies to achieve greater economic prosperity though 2018. The purpose of this document is to describe changes in Orange County’s economic climate related to new developments in 2014, provide an update on the status of previously-identified Red-Zone tracts, and illustrate the progress Orange County has made in achieving its five-year targeted CEDS goals over the past year. Introduction Page | 2 Orange County Comprehensive Economic Development Strategy 2014 Annual Update Red-Zone Analysis: 2014 Update Orange County’s Red-Zones are cities or census tracts with abnormally high unemployment rates or per capita income levels far below the standard. A given city or tract is considered a Red-Zone in this analysis if one of two conditions are met: the unemployment rate is at least 2 percent above the United States average employment, or the area’s per capita income is only 80 percent of the United States average. Using the most current results from the 2012 American Community Survey, we have reevaluated each city and tract’s Red-Zone status. Although the general regions have changed little since 2013, the total number of Red-Zones has increased in recent months at the tract level, signifying greater need for localized investments. Red-Zones by City Although many tracts within the city of Anaheim are still struggling, unemployment in Anaheim has improved significantly enough in the short-term to put the city in aggregate out of the red. The two-year average unemployment fell from 13 percent in the 2013 CEDs to 11.7 percent in the current overview, enough to place Anaheim below the Red-Zone threshold of 11.9 percent. One city, San Juan Capistrano, transitioned into a Red-Zone area over the past year, reaching an average unemployment of 12.2 percent. Santa Ana, Garden Grove, Westminster, and Stanton have all retained their current Red-Zone status, showing areas in need of ongoing support. Stanton is the only city in 2014 that has both an unemployment rate and per capita income level meeting Red-Zone designation levels (13.9 percent unemployment, and $18,979 per capita income). Garden Grove also fulfilled both Red-Zone criteria last year, but this year is only designated due to its per capita income. Red-Zones by Tract At the tract level, Orange County has a total of 78 tracts simultaneously fulfilling both criteria versus the 71 denoted in last year’s CEDS report. Garden Grove saw the greatest net improvements, with four tracts moving out of Red-Zone status, while Anaheim gained the most new Red-Zones. The full breakdown of new and returning Red-Zones by tract can be found in the appendix. Red-Zone Tracts 2013 2014 Anaheim 19 22 Buena Park 1 2 Costa Mesa 1 3 Fullerton 4 6 Garden Grove 14 10 Huntington Beach 1 1 La Habra 0 2 Orange 2 1 Placentia 2 2 Santa Ana 18 18 Stanton 4 5 Westminster 5 6 Source: OCBC Analysis of American Community Survey Data Red-Zone Analysis: 2014 Update Page | 3 Orange County Comprehensive Economic Development Strategy 2014 Annual Update Fifty-seven census tracts are still considered Red-Zones carried over from 2013 to 2014, while 21 tracts are considered new Red-Zones for 2014. The majority of these newly-designated tracts are in Anaheim, Santa Ana, Costa Mesa, Westminster, and La Habra. However, 14 tracts from last year’s analysis have moved out of Red-Zone status this year – Garden Grove and Santa Ana together accounted for nine eliminated Red-Zones, showing that both historically low-income regions are making solid short-term improvements. Although Garden Grove’s net Red-Zones fell by 4, Santa Ana had no net change in its number of Red-Zone tracts, signifying that Santa Ana Red-Zones are being redistributed rather than addressed holistically. Of the 57 Red-Zone tracts retained between 2013 and 2014, 33 have shown improvement in reduced unemployment rates or increased per capita income. In short, the number of Red-Zones has generally increased since last year, but the majority of Red-Zones are improving, moving closer to breaking free of their Red-Zone status. Despite improvements at the city level, Anaheim remains an important “danger zone” for Orange County to monitor, and targeted investments in the coming years will help the city improve its standings. Moving forward, Orange County cities need to adopt Red-Zone reducing policies that take a citywide approach to improving the quality of employment offered. The following section will introduce how the CEDS aims to guide cities toward mitigating the spread of Red-Zones. Red-Zone Analysis: 2014 Update Page | 4 Orange County Comprehensive Economic Development Strategy 2014 Annual Update CEDS Goals and the Current Orange County Economic Climate When Orange County selected its five overarching goals for the 2013-2018 CEDS, it targeted the relationship between workforce, infrastructure, and low-income residents as its chief areas to advance in tandem. Preparing residents of all income levels for new jobs and enabling them to utilize a multitude of travel methods to reach them is the fundamental approach used to increase regional prosperity. The initial goals put forth by the CEDS are as follows: Goal 1: Advance the Lives of Red-Zone Residents Goal 2: Provide World-Class Education and Workforce Opportunities Goal 3: Plan and Develop State-of-the-Art Infrastructure Goal 4: Promote Competitive and Growing Clusters Goal 5: Improve Orange County’s Economic Competitiveness in a Global Economy The original 2013-2018 CEDS document describes the specifics of these five goals in greater detail. Although the goals themselves have not changed since last year, the climate in which they can be achieved has already seen significant changes. 2014 thus far in Orange County has been characterized by: o Employment improvements for several key industry sectors, including Construction, Health Care and Information Technology o Housing prices returning near pre-Recession levels o An ongoing state of drought throughout the region raising fears of a threatened water supplies o Major progress on new transit-related infrastructure projects, particularly in low-income regions o New groundwork increasing the economic viability of alternative fuel vehicles Additionally, there are several exciting new developments supporting CEDS implementation that have already launched this year. In this update, we hope to mention these and other changes in brief to summarize how Orange County is able to adapt to the shifting economic climate while keeping the CEDS goals on track for achievement. CEDS Goals and the Current Orange County Economic Climate Page | 5 Orange County Comprehensive Economic Development Strategy 2014 Annual Update Orange County Economic Overview: 2013 to Present How has Orange County’s economic climate changed since the beginning of 2013? The following overview sets the stage for discussion on new CEDS-supporting activities that have emerged in 2014 by highlighting where Orange County has improved in four areas – employment, economic development, housing, and infrastructure – since the previous January. We find that the changes and expectations for 2014 thus far are generally optimistic, characterized by falling unemployment, a booming housing market, and positive forecasts for growth made by Orange County businesses. Demographics Average Age and Diversity of Population Increases Year-over-Year New population estimates debuting in September 2014 show that Orange County’s population is leaning toward an older average age, consistent with forecasts describing Orange County’s trend of aging residents. 12.8 percent – equal to nearly 400,000 residents – were above the age of 65 in 2013 versus only 11.9 percent in 2012. Simultaneously, residents under the age of 25 fell from 34.2 percent to 33.5 percent just over the span of one year. Population by Age 2012 2013 Total 3,055,745 3,114,363 5 and Below 6.3% 6.1% 5-9 6.5% 6.4% 10-14 6.9% 6.6% 15-19 7.2% 6.9% 20-24 7.3% 7.4% 25-29 7.1% 7.1% 30-34 6.7% 6.8% 35-39 6.8% 6.5% 40-44 7.5% 7.3% 45-49 7.5% 7.3% 50-54 7.2% 7.3% 55-59 6.0% 6.4% 60-64 5.1% 5.1% 65-69 3.7% 4.1% 70-74 2.7% 3.0% 75-79 2.1% 2.2% 80-84 1.7% 1.7% 85 and Above 1.7% 1.8% Source: U.S. Census Bureau, Population Estimates Program Orange County Economic Overview: 2013 to Present Page | 6 Orange County Comprehensive Economic Development Strategy 2014 Annual Update The prevalence of ethnic groups also showed slight increases since last year, with the White population of Orange County falling from 43.1 percent of the total to 42.6 percent.
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